Entergy to retire FitzPatrick plant
02 November 2015
Entergy announced today it will close the single-unit James A FitzPatrick nuclear power station in New York state - in late 2016 or early 2017. The company cited significantly reduced plant revenues, poor market design and high operational costs as key drivers behind its decision.
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| FitzPatrick (Image: Entergy) |
Entergy said it will inform the New York Independent System Operator (NYISO) - operator of the electric grid supplied by the plant - and the New York Public Service Commission that the plant will retire at the end of its current fuel cycle.
The company said that it had worked "tirelessly" alongside New York State officials over the past two months to try and reach a "constructive and mutually beneficial agreement" to avoid shutting the plant. The 813 MWe boiling water reactor has been supplying electricity to the grid since 1975 and is licensed to operate until 2034.
Entergy identified several factors that make running the plant no longer economically viable. Sustained low current and long-term wholesale energy prices, driven by record low gas prices due to Fizpatrick's proximity to the Marcellus shale formation, have reduced the plant's revenues. Current and forecast power prices have fallen by about $10 per megawatt-hour, which the company says equates to a projected annual loss of more than $60 million in revenues for the nuclear plant.
A "flawed" market design that fails to recognize or adequately compensate nuclear generators for the benefits of nuclear power was the second factor cited.
"FitzPatrick and other nuclear power generators provide a key fuel diversity benefit with significant climate-related advantages. In addition to generating virtually carbon-free electricity, nuclear plants offer onsite fuel storage, maintain grid reliability and serve as a significant source of large-scale 24/7 energy generation," the company said.
The high-cost structure for FitzPatrick as a single-unit plant, and its location in a region with excess power supply and low demand, further reduces its ability to generate revenue, Entergy said.
Entergy last month announced the closure of the single-unit Pilgrim plant in Massachusetts, for similar reasons.
"Given the financial challenges our merchant power plants face from sustained wholesale power price declines and other unfavourable market conditions, we have been assessing each asset," Entergy’s chairman and CEO Leo Danault said.
Entergy owns and operates a fleet of ten reactors across several US states and provides support and management services for an eleventh. The company said it "remains committed overall to nuclear power”.
The closure of FitzPatrick will leave the two-unit Indian Point plant as Entergy's only operating nuclear capacity in New York state, alongside Exelon's single-unit Ginna and twin-unit Nine Mile Point plants.
Entergy's nuclear units are not the only US reactors to find themselves at risk of premature closure for economic reasons under the short-term nature of deregulated electricity markets. Exelon announced last week that it would defer any decision on the future of one of its at-risk plants, Clinton, after the Midcontinent Independent System Operator regional transmission organization acknowledged the need for changes to the design of the southern Illinois electricity market.
Researched and written
by World Nuclear News